All posts by mickeybarb@charter.net

Nigeria Takes FID on $3Bn Fertilizer, Methanol Project

Ammonia, Methanol, News, News Briefs, Nigeria, Urea

Nigeria has taken the final investment decision (FID) for the  Brass Fertilizer & Petrochemical project to be located at Odioma, Brass Island, in the country’s Bayelsa state, Bloomberg reported late last week, citing an announcement by the Nigerian National Petrochemical Corp. (NNPC) on Jan. 29

The $3 billion project will be operated by Lagos-based Brass Fertiliser & Petrochemical Co (BFPCL), a joint venture between NNPC, the Nigerian Content Development and Monitoring Board, and Thailand’s DSV Engineering, according to a BizWatchNigeria report.

The plant is expected to produce 770,000 mt/y of ammonia, 1.3 million mt/y of urea, and 1.75 million mt/y of methanol, according to information on BFPCL’s website. The methanol plant will be Nigeria’s first such production facility.

The project will use gas from unexploited fields as its feedstock, and the project will also involve the development of pipelines and a gas processing plant.

The  project “is logistically well-positioned to serve the large, growing, and captive market for urea and ammonia in Sub-Sahara Africa and exporting methanol to the global market,” BizWatchNigeria reported, citing NNPC in a series of tweets on Jan. 29

The FID comes seven years after the project was first conceived, and a full three years after the project originally was planned to start, according to the Bloomberg report.

Acron’s Dorogobuzh Inks New Collective Agreement

News, News Briefs, Russia

Acron Group subsidiary Dorogobuzh and the Dorogobuzh primary trade union organization have signed a new collective labor agreement for 2021-2023, the Russian fertilizer group said on Feb. 1.

The new agreement was inked in late December, and covers social and employment relations between the company and its employees

Acron Group last week said it had signed a new collective three-year agreement for 2021-2023 with the Russian chemical industry’s primary trade union organization, Roskhimprofsoyuz, covering all of its employees (GM Jan. 29, p. 34).

Scheffer/Phosfaz Deal Reported

Brazil, News, News Briefs, Phosphate

Mato Grosso-based Scheffer, a major Brazilian agribusiness involved in crop production and cattle raising, plans to purchase exploration rights for six phosphate mines and a processing plant in Pará from Phosfaz Fertilizantes, which is owned by investment firm BTG Pactual, Sao Paulo, according to a report by Valor Econômico. The deal is expected to garner Scheffer some 100,000 mt/y of phosphate fertilizer, enough to keep it self-sufficient for a decade, with 30 percent reported to be available for third parties.

Ammonia

Ammonia, Black Sea, California, Eastern Cornbelt, Market Watch, Middle East, Northwestern Europe, Pacific N.W., Southeast Asia, Tampa, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf/Tampa:

The Tampa ammonia price for February stands at $330/mt DEL, up $60/mt from January’s $270/mt.

Eastern Cornbelt:

Sources reported prompt ammonia pricing now at the $430/st FOB level across the Eastern Cornbelt, up another $30/st from the previous week.

Spring prepay pricing was up as well, with sources quoting new offers at $470-$500/st FOB in the region, depending on location. The lower end of the prepay market was reported at Lima, Ohio, and Kingston and Seneca, Ill., with the upper end confirmed at Mount Vernon, Ind., and Henderson, Ky.

Western Cornbelt:

The ammonia market reportedly firmed to $420-$430/st FOB Western Cornbelt terminals for prompt tons, depending on location. New prepay offers ranged from $470-$490/st FOB in the region, up a full $50/st from the previous week, with the low reported at Palmyra, Mo., and the high at Garner, Iowa.

Prompt ammonia pricing in the Southern Plains and South Central regions reportedly edged up to $360/st FOB Pryor and Woodward, Okla., $380/st FOB Verdigris, Okla., and $390/st FOB Donaldsonville, La., for truck tons. Sources reported no spring prepay offers out of southern production points in early February.

California:

The ammonia market in California remained at $379/st DEL in early February, with aqua ammonia posted at $109/st FOB. Sources said they expect a “significant increase” in March or later in February, however.

Pacific Northwest:

Anhydrous ammonia pricing in the Pacific Northwest has reportedly jumped to $455/st FOB Ritzville, Wash., and other regional terminals, with delivered tons quoted at $475-$488/st DEL for new offers, depending on location and supplier. Those levels reflected an increase of more than $100/st since the first of the year.

The aqua ammonia market was up a well, to $115-$130/st FOB, depending on location.

Western Canada:

Limited spring pricing for anhydrous ammonia in Western Canada was reported at C$805-$815/mt DEL in early February, up from C$730-$760/mt in mid-January.

Black Sea:

Ammonia prices in the region keep moving up. Trammo picked up a lot of 15,000 mt from Rassosh for $276/mt FOB. A second lot was also booked for March with a price yet to be determined. Sources said whatever gets done will be another move to the $300/mt FOB target of producers.

Traders are reportedly getting so many inquiries they are having a hard time finding tons to handle the potential deals. The limited tonnage and steady demand are providing a certain amount of optimism to producers and traders that the increases, while they may eventually slow down, will not dramatically reverse.

One trader said even if the plants in the Arab Gulf and Trinidad come back online to full production, demand will still be strong enough to keep Yuzhnyy from dropping below $200/mt FOB again.

Middle East:

Sources reported just enough Arab production to cover contractual needs, adding that inquiries for spot tons are quickly dismissed with reports of nothing available. Because of the lack of spot tons, the industry is not able to nail down a new price. If tons do pop up, however, one trader said the price would be about $300/mt FOB, instead of the current $280/mt FOB calculated from the last FACT/India tender.

Egypt sold a cargo of 15,000 mt through Fertiglobe to Namhae for $400/mt CFR. The estimated netback on the sale is $320/mt FOB. Sources said the fact that this trader had to go to Egypt for material for their Southeast Asian customer shows just how tight supplies are from the Arab Gulf to Southeast Asia. The price helped set a higher market in the Pacific.

A sale from Algeria to Koch at $340/mt FOB also helped set indications for new prices in Northwest Europe that are much higher than other deals that feed into Antwerp would indicate.

Southeast Asia:

Besides the 15,000 mt that Fertiglobe obtained in Egypt for Namhae, a second lot of the same amount was bought by Mitsui from Indonesia for Lotte. Sources said the Indonesian product sold for $390/mt CFR.

The two sales dramatically moved up prices in Southeast Asia from the $360/mt CFR level reported just last week. Sources said Chinese buyers will end up having to pay at the higher end of the scale as they come into the market to cover lost domestic production due to energy issues and spot closures caused by COVID-19 shutdowns.

Northwest Europe:

The Baltic ammonia price for February came in higher than expected. Initial talks were focused on a high of $275/mt FOB thanks to a quick deal settled at the end of January. The new price is now pegged at $280/mt FOB for this month, however.

Higher prices in the Baltics, North Africa, and Yuzhnyy are combining to push up prices in Northwest Europe. Immediately the Baltic price pushed Antwerp to $320-$330/mt C&F, although calculations from the Koch purchase in Algeria suggests a price closer to $380/mt C&F. If Yuzhnyy producers are successful in getting $300/mt FOB, sources said the Northwest Europe price would be at $350/mt C&F.

The most likely result of the shifts, said one trader, is that the Northwest Europe price will drift slowly closer to the $350/mt C&F price this week as buyers look to cover their needs against limited resources.

Urea

Black Sea, Brazil, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Nigeria, Pacific N.W., U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf:

The NOLA granular urea barge market this week was more like a rollercoaster than a skyrocket. After trading as high as $367/st FOB in early-week trading, sources said prices dipped to as low as $326/st FOB before rebounding back into the $340s/st FOB.

Eastern Cornbelt:

Urea prices in the Eastern Cornbelt reportedly worked their way up from a low of $395/st FOB earlier in the week to a high of $400-$415/st FOB by Feb. 4.

The market FOB Cincinnati, Ohio, was reported at $400-$410/st FOB at midweek, with Louisville, Ky., pricing quoted firmly in the $405-$410/st FOB range. New offers FOB East Dubuque, Ill., ranged from $395-$415/st FOB, depending on time of shipment, with the low reported for April-May and the high for February-March.

Western Cornbelt:

The urea market ranged broadly from $375-$410/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high at Camanche, Iowa, for prompt tons.

The Catoosa/Inola, Okla., urea market was pegged at $370-$380/st FOB, while pricing FOB St. Paul, Minn., was quoted at $390-$410/st FOB, up $5/st from the previous week.

California:

Although some urea tons were still reportedly contracted in late January at the $360/st level FOB port terminals, sources said new offers in early February were at $400/st FOB or higher “if anyone has anything to offer for prompt.” Rail-DEL tons in early February were pegged at the $480/st level, give or take.

Pacific Northwest:

The urea market was reported at $450/st FOB Rivergate, Ore., and $455/st FOB Aurora, Ore., up $50/st from mid-January pricing levels. Delivered urea was pegged at $450-$480/st in the region, depending on location and supplier, with the low confirmed in Montana and the high in Washington. The delivered market in Idaho was quoted at the $470/st level in early February.

Western Canada:

Urea pricing in Western Canada had reportedly firmed to C$595-$615/mt DEL for Q1 tons, up from C$510-$535/mt in mid-January, with Q2 offers quoted at C$610-$645/mt DEL, depending on location. Nutrien on Feb. 1 confirmed that it was raising its urea posting in Saskatchewan to C$620/mt DEL, reflecting a C$125/mt increase since Jan. 1.

India:

Sources said the Indian government now seems to want to push a urea tender back to the end of the month. Sources said the delay could be a traditional tactic of the Indian buyers in a bull market.

In the past, the Indian buying houses have tried to hold off buying until the price increase fever burns itself out and a price ceiling is identified. Then as the price appears to crest, the tender will be called with the Indians forcefully arguing that the only place to sell urea is to India – and only at a much lower price.

This time, however, traders report that there appears to be strong enough demand to keep prices up into March. They point to the ever-higher price into April being paid for Egyptian product, with Chinese tons limited because of reduced output and the Arab producers only slowly coming back online.

So even if a price correction is expected, sources said it may not happen until after the shipments are slated to start for awards issued in a late-February tender.

Indonesia:

The price of granular urea jumped about $37/mt FOB in just one week. Kaltim sold 45,000 mt at $366/mt FOB, against a price of $328.70/mt FOB last week. A prilled order of 25,000 mt went for $354.90/mt FOB, against the last purchase of $321.75/mt FOB.

All the tonnage was reportedly picked up by Oracle Commodities of Singapore, which sources described as a new player in the Indonesian urea market. The big question in the industry, however, is where Oracle will be able to sell these tons at a profit.

Sources reasoned that the older granular price of $328/mt FOB could have been used as part of a larger offer into the upcoming Indian tender, while still allowing for some profit. The new price, however, shows an Indian landed price of around $390/mt CFR, a level that some think is much higher than what will happen in the tender once it is called.

Middle East:

Sources reported a Fertiglobe urea sale of $365/mt FOB. Others also reported deals in the low $370s/mt FOB, giving a range of $365-$375/mt FOB. Reportedly, the bulk of the bids floating in the area are $368-$373/mt FOB.

The positive upward force on prices is prompting producers to say their new price is $390-$400/mt FOB. Sources said potential buyers are discounting those prices as not achievable, however, and move right to the $360s/mt FOB. The fact that producers are still willing to talk, said one trader, means the $390s/mt level is aspirational, but not realistic for now.

Pricing ideas in the $360s/mt and $370s/mt FOB fit in with the deals recently cut in Egypt. Sources said traders often look at prices from the Arab Gulf to be about $10/mt less than the Egyptian settled prices.

This week the price increases continued out of Egypt. Alexfert sold 15,000 mt each to two traders at $380/mt FOB for April shipment. MOPCO also settled at $380/mt FOB for 5,000 mt for late April and possibly early May.

Prices for February-March in Egypt topped out at $362/mt FOB with a small Abu Qir order. Prices jumped into the $370s/mt and $380s/mt FOB for April. Producers said it is still too early to predict May prices, but many in the industry said they do not see much to slow down the upward trend.

Algeria showed sales at $363/mt FOB for April and $380/mt FOB for May. Algeria is often seen as a supplier with slightly lower prices, which are used more to confirm existing price trends rather than leading them.

Black Sea:

Limited urea tons from the area make nailing down the market difficult, said sources. However, there are reports of deals at $330-$340/mt FOB for some small cargoes. Reportedly, producer offers at $360/mt FOB are being quickly dismissed by buyers.

China:

A numbers of factors are keeping Chinese urea from the global market, but traders have talked with producers about obtaining some material. The results of these talks show little movement in the $340s/mt FOB price for prilled and granular, even as producers begin their offers in the low-$360/mt FOB. Sources said while some Southeast Asian buyers are looking for product, they are not willing to pay what producers are asking.

Availability of Chinese urea is limited for a number of reasons. Sources said many plants are still shut down or in reduced output because of limits on electricity to run the plants. While this situation is slowly correcting itself as more power plants get the coal they need to operate, additional impediments remain.

Some plants are located in hot spots of renewed COVID-19 outbreaks, forcing them to close as part of aggressive quarantine efforts by the government. In some cases, the quarantine orders affect the road and rail systems out of the plants, meaning the urea cannot be delivered to the distribution terminals or export ports. In other cases, the shutdown orders directly affect the staffing of the terminals and ports.

With delays being seen all around, some plant operators are letting their workers off early for the week-long Chinese New Year Golden Week centered on Feb. 12. One trader said it looks as if many plants will be closing this weekend and not reopening until Feb. 22.

Sources said if India does call its tender at the end of the month, as is now expected, production will be back up and many of the COVID-related restrictions may be lifted, allowing Chinese urea to play a role in the tender. Some sources said even if production is slow to start, there are reportedly a lot of tons sitting in railcars waiting to be sent to an export port or domestic terminal.

Nigeria:

Dangote told the Nigerian government its new plant will be ready for production during the first quarter of 2021. This announcement counters earlier reports that the plant may not be ready for full operation until the last half of the year.

The 3 million mt/y plant is expected to turn over the first quarter of its production to the domestic market. The Dangote company had earlier said half of its production would be geared to the 750,000 mt Nigerian domestic market and to neighboring African countries. The other half would be available for offshore clients.

Buyers in Brazil remain anxious to get some of the Dangote tons. The Brazilians are attracted by the shorter steaming time across the Atlantic compared to their current suppliers in North Africa and the Arab Gulf. Sources said some traders are also asking for favorable netback prices on top of cheaper freight to help the new plant gain a foothold in the Brazilian market.

Other traders are also looking at the Dangote tons for additional markets, mostly in North America and Latin America.

The Dangote plant will have to compete with the other major urea manufacturers in the country for the limited domestic market. The competition might be more than the 750,000 mt reported annual demand for urea. Press reports said the government no longer plans to pay for food imports but will, instead, encourage more agricultural output. This proposed increase in farmed acreage could also increase urea demand.

One of the long-time producers in the country, Notore, announced this week that it will be taking down its plant for maintenance to get it set up to produce at levels close to 95 percent of its rated 500,000 mt/y capacity.

Brazil:

Deals at the ports and inland reflect the global fire that is going on in the urea market.

Sources said prices at Paranagua have moved up to $385-$390/mt CFR. Sellers are pushing even harder for $390/mt CFR, and are expected to achieve that level soon. They point to increased optimism by farmers for the 2021/22 planting season as farmers and cooperatives make plans to step up their fertilizer purchases.

Inland, the main selling center at Rondonopolis showed a move to $475-$510/mt FOB ex-warehouse. The barter rate stayed even at 60 bags of corn for 1 mt of urea.

UAN

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA UAN barges are hard to peg, but most sources put them in the $180-$185/st ($5.63-$5.78/unit) FOB range, if not higher. That range was up from the week-ago $160-$165/st ($5.00-$5.16/unit) FOB.

Eastern Cornbelt:

The UAN-32 market in the Eastern Cornbelt was pegged solidly in the $220-$240/st ($6.88-$7.50/unit) FOB range out of regional terminals for most of the week, depending on location and time of shipment, with the low confirmed at Peru, Ill., for March tons and the high at Burns Harbor and Terra Haute, Ind., for April-May tons.

Sources at midweek pegged the Cincinnati market at $225-$230/st ($7.03-$7.19/unit) FOB for UAN-32, depending on supplier and time of shipment, with UAN-28 offers there reported at $197/st ($7.04/unit) FOB for prompt and $205/st ($7.32/unit) FOB for spring.

CF announced another UAN-32 price increase late on Feb. 4, however. New postings were up $5-$15/st from Jan. 27, and included May-June tons at $235/st ($7.34/unit) FOB Mount Vernon and Jeffersonville; $237/st ($7.41.unit) FOB Cincinnati; $239/st ($7.47/unit) FOB Peru; and $250/st ($7.81/unit) FOB Albany, Ill. New postings FOB Terra Haute firmed to $245/st ($7.66/unit) for prompt and $250/st ($7.81/unit) for April-May, with Burns Harbor postings moving up to $245/st ($7.66/unit) FOB for April-May.

Western Cornbelt:

UAN-32 pricing was pegged at $225-$235/st ($7.05-$7.34/unit) FOB in the Western Cornbelt, up $10-$15/st from the previous week, depending on location and time of shipment. The market FOB St. Louis, Mo., firmed $10/st on Feb. 4, to $235/st ($7.34/unit) FOB for May-June tons, up from the $225/st ($7.05/unit) price posted on Jan 27.

California:

Sources said UAN-32 prices in California “did a quick shift,” firming to $265-$270/st ($8.28-$8.44/unit) rail-DEL and $245-$250/st ($7.66-$7.81/unit) FOB port terminals for prompt Q1 tons, up from the $195-$210/st FOB range in mid-January. Effective Jan. 26, IRM reposted UAN-32 at $245/st ($7.66/unit) FOB Stockton.

Sources reported no Q2 offers circulating in California in early February. “After some early buys, suppliers are exploring replacement costs before quoting more,” said one regional contact.

“After regular conversations with our fertilizer reps about how UAN-32 would only see a $15-20/st increase, we were surprised to see such a spike,” added another California retailer source.

Pacific Northwest:

UAN-32 pricing in the Pacific Northwest was up $30-$40/st from mid-January, to $245-$250/st ($7.66-$7.81/unit) FOB regional terminals and $265-$270/st ($8.28-$8.44/unit) rail-DEL.

Effective Jan. 21, IRM reposted UAN-32 at $245/st ($7.66/unit) FOB Pasco, Wash., and Umatilla, Ore., $250/st ($7.81/unit) FOB Central Ferry, Wash., and $270/st ($8.44/unit) DEL in eastern Oregon and Washington.

Western Canada:

The Western Canada UAN-28 market was pegged at C$355-$370/mt (C$12.68-$13.21/unit) DEL for prompt and C$360-$375/mt (C$12.86-$13.39/unit) DEL for spring tons, up C$55-$70/mt from last report.

Ammonium Nitrate

Ammonium Nitrate, France, Market Watch, U.S. Gulf, Western Cornbelt

U.S. Gulf:

The thinly-traded NOLA ammonium nitrate market continued at $190-$200/st FOB.

Western Cornbelt:

Ammonium nitrate pricing remained at $290-$300/st FOB for the last reported offers in the region.

France:

Yara hiked its list price again for March deliveries of 33.5 percent ammonium nitrate (YaraBelaExtran 33.5) in France, raising the posted price to €318/mt bulk CPT. The new price is up €13/mt from the previous March price for French deliveries, posted less than a week ago (GM Jan. 29, p. 9).

Ammonium Sulfate

Ammonium Sulfate, Brazil, California, China, Eastern Cornbelt, Market Watch, Pacific N.W., Southeast, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf:

While major sellers have moved up postings, sources said there had been no new trades to truly test the market, leaving the price at the last reported $185-$200/st FOB. IOC this week moved its NOLA posting up from $200/st to $225/st FOB.

Eastern Cornbelt:

The ammonium sulfate market was pegged at $225-$250/st FOB in the Eastern Cornbelt, up $5-$10/st from last report, depending on location. The Cincinnati market was pegged at $225-$240/st FOB in early February, with East Dubuque pricing at $230/st FOB for prompt or spring tons.

Interoceanic (IOC) on Feb. 3 announced another price increase for PCI Nitrogen’s premium grade granular ammonium sulfate, effective immediately. New prices include $225/st FOB NOLA for barge tons, and $250/st FOB Illinois and Ohio River terminals.

“Higher nitrogen prices in general, along with ammonium sulfate being at a historic discount to urea, is driving a significant increase in demand,” the company said. “This increased demand is tightening availability as we lead up to an anticipated robust spring season.”

Western Cornbelt:

Ammonium sulfate pricing was quoted at $225-$250/st FOB in the Western Cornbelt, up $5-$10/st from last report, depending on location, with the low reported at St. Louis. The market FOB Camanche was pegged at the $230/st FOB level for prompt or spring tons.

IOC on Feb. 3 raised its ammonium sulfate postings to $245/st FOB Houston, Texas, St. Louis, Mo., and Delta terminals; $250/st FOB Upper Mississippi River terminals; and $255/st FOB Sioux City, Iowa, The company’s rail-DEL postings firmed to $250/st in the Southern Plains and $260/st in the Northern Plains.

Southeast:

AdvanSix on Feb. 3 announced an increase for new orders of bagged ammonium sulfate products FOB Chester, Va., raising the price by $30/st, effective immediately. The company said the increase is in response to strong demand and tightening supplies expected through mid-summer.

California:

Ammonium sulfate pricing was steady at $265-$275/st FOB for standard and $275-$290/st FOB for granular in California. Northern California sources reported rail-DEL offers at the $265-$275/st level.

Pacific Northwest:

Sources quoted the granular ammonium sulfate market in the $260-$278/st FOB or DEL range in the region, depending on supplier, with the bulk of offers in Idaho pegged in the $260-$270/st range. The upper end of the regional range reflected IRM’s posting for Tranzform and WesternPremium grades in Oregon, Washington, Idaho, Utah, and Montana.

IRM’s WesternStandard posting in those four states remained at $240/st FOB or DEL.

Western Canada:

Ammonium sulfate pricing in Western Canada was quoted at C$410-$435/mt DEL, depending on location and time of shipment.

Nutrien reported on Feb. 1 that its ammonium sulfate reference price in Saskatchewan had firmed to C$435/mt DEL, up C$55/mt since Jan. 1. The company said its ammonium sulfate and urea pricing increases reflect tightening availability and strengthening demand in the market, and the anticipation of a very strong spring application season.

China:

Reduced production and steady demand from Southeast Asian buyers has moved the ammonium sulfate price in China up again.  Sources peg the market at $125-$130/mt FOB for caprolactam grade tons, with traders reporting sales more at the upper end of the range.

Ammonium sulfate producers are facing the same problems as other industries in the country, including limited energy to run the plant, COVID-related restrictions, and the pending week-long holiday for the Lunar New Year.

Brazil:

The imported price for granular ammonium sulfate remained stable at $160-$165/mt CFR in Paranagua. Standard grade also held even at $140-$145/mt CFR. Likewise, the barter rate for 1 mt of ammonium sulfate remained at 39 bags of corn.

The stability at the ports did not play out at Rondonopolis, with prices there moving up to $280-$310/mt FOB ex-warehouse.

DAP/MAP

Brazil, California, Central Florida, China, DAP/MAP, Eastern Cornbelt, India, Market Watch, Pacific N.W., Saudi Arabia, Southeast, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida:

Sources described rising Central Florida DAP truck prices for the week. While posted rates were reported holding steady at the week-ago $485/st FOB level, market sources quoted tons transacting up to $515/st FOB.

MAP trucks followed a similar pattern. While postings were quoted as low as $505/st FOB, sales were reported up to $545/st FOB, up from the prior $475-$505/st FOB range.

U.S. Gulf:

Pricing on the NOLA barge phosphate markets continued to surge higher for the week, players said

Physical DAP barges at the start of the week were quoted trading at a $525/st FOB floor for domestically produced material, rising from the week-ago $475/st FOB low, while imports moved up to $545-$555/st FOB as the week wore on. Rumored early-week offers heard at $510/st FOB went unconfirmed on Feb. 4. The market’s prior high was quoted at $525/st FOB.

MAP tons were thinly traded for a second consecutive week, with only a handful of barges reported available through the period. Traders quoted a $595/st FOB high on Feb. 3, while early-week price ideas were typically noted even with the week-ago $550/st FOB ceiling.

A mix of persistent weak supply, robust grain pricing, and the potential for an early spring planting season continued to prop up values, leading some end-users to consider the prospect of reducing fertilizer application rates for the coming season, sources said.

The physical DAP barge market was quoted in the $525-$555/st FOB range, firming from $475-$525/st FOB at last report. MAP barge price ideas and sales were reported in the $550-$595/st FOB range, up from $500-$550/st FOB the week before.

U.S. Exports:

Market players reported a 5,000 mt DAP cargo selling into a single destination in Latin America during the week. Priced at $497/mt CFR, the tons were slated to load in second-half March.

Based on reported sales, the Gulf phosphate export markets were reported at $497/mt FOB for the week, firming from $460-$470/mt FOB in the prior report.

Eastern Cornbelt:

DAP and MAP prices in the Eastern Cornbelt saw multiple increases during the week, fueled by very tight supply and climbing NOLA values. DAP at Cincinnati was quoted at $555-$565/st FOB at midweek, up some $40/st from the prior week, but prices ended up again on Feb. 4 to $575-$585/st FOB Cincinnati and spot Illinois River terminals.

MAP prices climbed even higher. The week started with MAP pricing in the $580-$600/st FOB range in the Eastern Cornbelt, with the low confirmed at Cincinnati. By Feb. 4, the market had firmed to $600-$650/st FOB in the region, depending on location and time of shipment, with the low again reported at Cincinnati.

Western Cornbelt:

DAP prices surged to $555-$585/st FOB in the Western Cornbelt, depending on location and time of shipment, up a full $45-$55/st from the prior week. Sources quoted the St. Louis DAP market at $560-$580/st FOB, with the higher numbers confirmed later in the week.

The MAP market also saw another significant increase, firming to $625-$650/st FOB in the Western Cornbelt, up from $555-$595/st FOB the week before.

In the Southern Plains, sources pegged the Catoosa/Inola market at $570-$595/st FOB for DAP and $640-$675/st FOB for MAP as the week progressed, up dramatically from the prior week’s $515-$540/st FOB for DAP and $585-$600/st FOB for MAP. The St. Paul market ramped up quickly as well, to $585/st FOB for DAP and $650-$675/st FOB for MAP.

Southeast:

Nutrien announced another increase for DAP and MAP at Aurora, N.C. Postings reported firmed during the week to $550/st FOB for both products, up from $480/st FOB the previous week.

California:

The MAP market was pegged at a solid $660/st FOB or DEL in California as of Feb. 1, up $30/st from the previous week and some $85/st higher than mid-January. Prices firmed again on Feb. 4, however, to a high of $690/st FOB or DEL in the state.

Pacific Northwest:

MAP pricing as of Feb. 1 was quoted at $647/st FOB Aurora; $650/st DEL in Washington, Oregon, and northern Idaho; $640/st DEL in southern Idaho and Utah; and $630/st DEL in Montana. Those levels were up $30/st from late January, a full $85/st higher than mid-January reference prices, and some $130/st higher than Dec. 8 postings.

Another MAP increase took effect on Feb. 4, however, with new postings firming roughly $30/st again, to $660-$680/st DEL in the region.

Western Canada:

The MAP market in Western Canada was reported at C$895-$915/mt FOB for new offers in early February, up dramatically from the C$715-$730/mt FOB level reported in mid-January. Sources said delivered MAP offers in the region were north of C$900/mt as the week progressed.

Saudi Arabia:

The Saudi Arabia phosphate export market was reportedly moving up, with last-done trades in the $450-$470/mt FOB range, spiking from $400-$405/mt FOB reported previously. Sources expected continued firming in the next round of business, noting rumored mid-$500s/mt CFR offers into Brazil.

China:

Availability of DAP in China is almost nil. Sources said it was the rare order that gets filled. One such order was 25,000 mt shipped to Thailand at $505/mt CFR for a netback of $480/mt FOB, up about $35/mt FOB in one week.

Sources said talks with producers for any size of cargo usually started with the producers asking $500/mt FOB and then reluctantly sliding down, but only if the tonnage was available. Traders said supplies for export are limited.

Some of the producers said they want to make sure they have enough tons in reserve to satisfy the central government’s desire to provide full stockpiles for the spring application season. At the same time, phosphate plants are being affected by limitations on travel and understaffing caused by COVID-19 hotspots that are popping up around China, especially in the main production area.

India:

Buyers are looking for deals and finding none. Publicly Indian buyers said they are holding to the idea of paying no more than $400/mt CFR for DAP. Unfortunately for them, the price is now approaching $500/mt FOB.

Some large firms such as NFL are in direct talks with Chinese producers to secure large quantities in one-year contracts. In the case of NFL, the company wants 850,000 mt of DAP and other assorted phosphate-based fertilizers from June 2021 through June 2022. Sources said the talks are still at the general stage and have not broached pricing or how to adjust prices as the seasons progress.

Sources said by booking a year-long contract, NFL might be more willing to accept the current high prices in the expectations that prices will come down and the costs will average out to its favor. In addition, it allows them to avoid holding regular tenders that could boost the price with each call.

For the producers, the upside is that they will have a solid market for a large portion of their output for one year. The downside is that if the price drops below production costs or if the buyer refuses to take the tons until the price drops, they might end up losing money.

Talks are expected to continue for another week before China closes for the Lunar New Year celebrations.

Brazil:

Prices for MAP keep moving up. By midweek, a sale at $525/mt CFR in Paranagua was confirmed. On the heels of that deal, a Saudi offer for early March was reportedly floated at $540/mt FOB. By week’s end, traders were talking about deals closing at $550/mt CFR.

The limited tonnage available inland showed itself in the Rondonopolis price. Sources reported sales at $640-$700/mt FOB ex-warehouse, up from $592-$610/mt FOB last week. The barter rate remained at 1 mt of MAP for 75 bags of corn. The soybean ration, however, widened to 31 bags for 1 mt of MAP.